Key headlines from February - key EU policies agreed and big deals for forest carbon
Monthly newsletter on news from the new forest economy
Welcome to Arbonics’ monthly roundup of news relevant to forests, the voluntary carbon markets, and climate solutions more broadly. Bringing you the latest that catches our eye - as well as our own take on the news.
A lot happened in February, especially in the EU! But we are ready to summarise this busy month for you, from policy developments to new investments in the market.
Two significant EU policy developments in carbon removal and nature protection
Last month saw a few remarkable legislative advancements within the European Union that are set to reshape the landscape of environmental policy and carbon markets:
Political Agreement on EU’s Carbon Removal Certification Framework (CRCF): An essential step forward in standardising carbon removal practices, ensuring accountability, and fostering trust in carbon markets. We could write the entire email about this but will spare you for now. Looking to learn more? Check our overview article including what types of removals the framework includes and what’s still missing.
EU Parliament Passes Nature Restoration Law: An ambitious law aiming to restore at least 20% of the EU’s land and sea areas by 2030, addressing the urgent need for habitat and biodiversity recovery.
In addition to these two, EU Parliament also voted to criminalise ecosystem destruction.
💡 Arbonics’ take:
EU has clearly positioned itself as a leader in environmental policy. The CRCF is expected to enhance the credibility and appeal of carbon removal projects by introducing clear, standardised criteria for carbon removal. It has the potential to significantly shift the voluntary carbon market dynamics accelerating the move towards removals. Check out our co-founder Kristjan’s thoughts on CRCF as well.
The passing of the nature restoration law is a great win for nature and biodiversity. However, road ahead is difficult to ensure that the implementation includes dialogue and collaboration with the agricultural sector. Environmental regulation is just one of many reasons, European farmers have taken the streets recently. It’s important that the law is implemented with the right incentives in mind and agricultural sector not left behind.
Finite Carbon launches a new marketplace for forest carbon projects in the US
BP-owned Finite Carbon has launched a new marketplace aimed at enhancing transparency and connection between forest carbon projects and potential buyers. This platform showcases projects across 260,000 acres, representing 5.7 million credits, complete with landowner testimonials and site-specific multimedia. The initiative aims to create a deeper understanding and trust between all market participants.
💡 Arbonics’ take:
CRCF effectively showcases what policymakers can do to improve trust and transparency in the market and platforms like these are a great example of private sector’s way of improving the voluntary carbon market. Providing clarity and confidence to potential buyers while empowering landowners with a platform to showcase their sustainability efforts.
Project suspensions and innovations: Pina Earth piloting new methods to forest projects and Agreena’s soil carbon project on hold
German startup Pina Earth is pioneering a new blended approach to carbon project methodologies, combining Afforestation, Reforestation, and Revegetation (ARR) with Improved Forest Management (IFM) techniques, particularly tailored to the European context. The method aims to address the specific challenges faced by the region's managed forests, promoting biodiversity and resilience against climate threats.
Agreena's Verra project has been put on hold, reflecting the rigorous vetting processes in the voluntary carbon market. This underscores the importance of maintaining high standards and transparency in project development and certification.
💡 Arbonics’ take:
The development of region-specific methodologies like Pina Earth's is great to see and makes sure that the project addresses the unique challenges of European forests. While project suspensions like Agreena’s can be seen as setbacks, they are also indicative of the market's commitment to integrity and quality.
Notable sales and investments: Gresham House launches a £300M biodiversity fund, Uruguayan timber company sells 2.2M credits and Microsoft buys into agroforestry
Gresham House (UK-based alternative asset manager) has launched a new £300M biodiversity fund, highlighting the growing interest in integrating biodiversity with carbon sequestration efforts.
Uruguayan timber company LUMIN sells 2.2M Verra verified credits to Climate Impact Partners from their The La Pitanga project, which includes tree planting across 17,000ha
Microsoft signed an offtake agreement for 350,000 tonnes of carbon removal credits from a Kenyan agroforestry project
💡 Arbonics’ take:
The emergence of funds focused on biodiversity is a great signal for more investment in the space to ensure biodiversity goes hand in hand with carbon in nature-based projects. Purchases by high-profile buyers such as Climate Impact Partners or Microsoft show that demand for forest credits and particularly forest carbon removal such as afforestation continues to be strong.
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